Nancy Bernkopf Tucker If Taiwan Chooses Unification, Should the United States Care? If Taiwan chooses unification with China, are U.S. interests jeopar- dized? Until now, U.S. policy has assumed that unification would occur only through forcible action on Beijing’s part. U.S. officials, not anticipating a day when peaceful negotiations could bridge the huge gulf between the two parties, have not planned for that possibility. Confronted with the danger that cross-strait antagonism could burst into war, U.S. diplomats, statesmen, and scholars have been the loudest and most consistent supporters of dia- logue across the Taiwan Strait, asserting that, as long as the process is peace- ful, Washington is indifferent to the outcome. Yet, conditions across the strait have been changing. A growing tide of Taiwan investment in China has raised questions about its political conse- quences, suggesting that some version of unification actually could materi- alize—not immediately, but not too far off either. For Washington, this development would mean an entirely new array of economic, political, and strategic forces in East Asia, as Taiwan and China, as well as Japan, adjust to a different reality. The agnosticism of U.S. policy has been in large part a re- sult of not examining a future that appeared infinitely remote. Now that cir- cumstances are changing, can Washington’s detachment be sustained? Should it? What Has Changed in Taiwan Developments in Taiwan during the last decade have produced radically contradictory impulses that are pulling Taiwan and China apart at the same time as they are being drawn irresistibly together. How this dilemma will be Nancy Bernkopf Tucker is professor of history at Georgetown University and the Georgetown School of Foreign Service. Copyright © 2002 by The Center for Strategic and International Studies and the Massachusetts Institute of Technology The Washington Quarterly • 25:3 pp. 15–28. THE WASHINGTON QUARTERLY ■ SUMMER 2002 15 l Nancy Bernkopf Tucker resolved—whether through the prolongation of an uneasy and fluid status quo, a creative compromise, or capitulation to one set of priorities—worries those with interests in the island’s future. The surging level of Taiwan investment in China is the single most com- pelling sign that unification might occur without war. This “mainland fever” threatens to drain the island of capital and jobs while making Taiwan’s pros- perity contingent on the political relationship between Beijing and Taipei. As Taiwan businesspeople become increasingly committed to their mainland operations, they exert pressure on Taiwan’s government to fa- China’s model of cilitate their ventures. This means calls for ‘one country, two loosening financial restrictions; expediting the systems’ does not three links of direct transportation, communi- provide a viable cation, and trade; or even agitating for unifi- cation with China on China’s terms. roadmap. The economic ties between China and Tai- wan have been strengthening for more than a decade, but recently have multiplied and deep- ened. According to Taiwan’s Ministry of Eco- nomic Affairs, more than three-quarters of Taiwan’s companies have an investment on the mainland, reaching some $60 billion in more than 50,000 ventures. Taiwan increasingly exploits mainland factories to supply both China’s domestic market and Taiwan’s international customers.1 Beijing hopes the lure of China’s great economic expansion will be an ir- resistible magnet for repossessing Taiwan. One exuberant mainland official interviewed in early 2002 declared, “Our economy is our best weapon. We won’t attack them. We will buy them. It’s very Chinese.”2 Indeed, in 2001, with the U.S. economy weak, Japan mired in long-term stagnation, and only modest domestic reform, Taiwan’s economy contracted for the first time in 50 years. Yet, even as the United States and the world recover from reces- sion, opportunities in China will remain enticing. In fact, Taiwan president Chen Shui-bian’s administration convened an Economic Development Advisory Council in late August 2001 to propose ways to reinvigorate internal development and exploit cross-strait contacts. Chen also jettisoned the “go slow, be patient” policy designed to limit Taiwan’s exposure to China and avoid strengthening the enemy. Beginning last No- vember, businesses have been urged to pursue “active opening, effective management” across the strait, even if the result is taking more money and jobs to the mainland. Tsai Ing-wen, chairwoman of the Mainland Affairs Council, observed, “Mainland investment should be an integral part of our global expansion plan.” This approach requires Taiwan to keep ahead of 16 THE WASHINGTON QUARTERLY ■ SUMMER 2002 If Taiwan Chooses Unification, Should the United States Care? l China on the technology ladder and to utilize this competition to force rapid modernization of Taiwan’s financial institutions, service sector, and re- search-based industries.3 Entry into the World Trade Organization (WTO) promises to intensify cross-strait economic integration. Participation in the WTO will create in- centives to maximize the speed and ease of transportation and communica- tion, renewing pressure for use of the three links despite Taiwan’s security concerns and Beijing’s insistence on a “one China” pledge. WTO rules will also reduce trade and investment barriers and force greater bilateral interac- tion even if Beijing resists using multilateral dispute resolution mechanisms. At the same time, Taipei will have fewer ways to guard against Chinese ini- tiatives that, although economic in substance, may have broad political pur- poses. Already Beijing has begun to push a Chinese Free Trade Area incorporating China, Hong Kong, and Macao. It seeks to add Taiwan by 2005.4 Moreover, Taiwan businesspeople will leap into new commitments on the mainland regardless of security implications. Vigorous economic exchange has not only added to prosperity in Taiwan and China, it has also perhaps most remarkably led large numbers of Taiwan merchants and manufacturers to live on the mainland. Taiwan residents of enclaves in Shanghai and elsewhere surround themselves with Taiwan cul- ture and food but live in China in far greater luxury than they could afford at home. Although political restrictions such as schoolbook censorship are increasing, enthusiasm for opportunities on the mainland remains strong. Not surprisingly, China sees these enterprising people as the vanguard of unification. Simultaneously, other trends less favorable for unification have also been accelerating. After more than a decade of political and social transforma- tion, the Taiwan public increasingly perceives itself as something other than simply Chinese. Beijing originally denied the potency of a political and cul- tural divide across the strait, insisting that all Taiwanese were Chinese and that that basic makeup could not be altered. Yet, the growth in prosperity, democracy, and opportunity on the island brought greater numbers of Tai- wanese into the political system. Gradually, Taiwan history and geography invaded school curricula. Use of the Taiwanese language captured the public, particularly the political, arena. On the island, as on the mainland, shifts in attitudes, generations, and historical circumstances created a new Taiwan nationalism—a potent force for local unity based on a Taiwan identity. Acceleration of this trend alarmed and angered Beijing. Thus in 2000, in a notorious effort to quicken the pace of unification—lest Taiwan’s Chinese roots become too attenuated—Beijing issued a White Paper. Timed for the eve of a Taiwan presidential election, the document warned that delay, as THE WASHINGTON QUARTERLY ■ SUMMER 2002 17 l Nancy Bernkopf Tucker much as a declaration of independence, could mean war. China aroused an angry backlash and failed to make rapid unification more imaginable. Once celebrated equally on both sides of the strait, the idea of one China no longer commands unquestioned agreement in Taiwan. Presently, the vast majority of the people prefer an open-ended status quo. Whether the public might find some formula for union with the mainland palatable neither Beijing, Washington, nor Taipei knows. China’s model of “one country, two systems,” however, clearly does not provide a viable roadmap. Thus, Taiwan today is caught in a contradiction between its economic and political priorities. Economic dependence on and integration with China—the changing perceptions of the island’s needs and interests—may make unification desirable or at least necessary for Taiwan. Future prosperity on the island clearly appears linked to the mainland. Whether effective ex- ploitation of the China market demands that Taiwan be a part of China is unclear. Moreover, as integration progresses, disrupting ties that bind main- land businesses to Taiwan in order to serve political goals becomes more dif- ficult for Beijing. Finally, the Taiwan settlers in China seem to symbolize the future of relations across the strait, but their significance may be more com- plex than their numbers suggest. If they are largely mainlander in back- ground or pro-mainland in their political sympathies, then their choice to live in China is not so startling, and by doing so they further reduce the de- clining population in Taiwan of Taiwanese eager for unification. What Has Changed in China This country has spent the last decade expanding economically and trans- forming militarily, raising the stakes for good Sino-U.S. relations by enhanc- ing Beijing’s